Brazilians Used Covid Aid to Buy More Beer, Fueling Ambev Sales

An emergency stipend provided by the Brazilian government to help informal workers weather the pandemic has also been helping boost beer consumption in Latin America’s largest economy.

Ambev SA, the unit of Anheuser-Busch InBev that operates in 16 countries, said its Brazil beer volume surged 25% in the third quarter from a year earlier, crushing estimates from analysts tracked by Bloomberg. Net revenue totaled 15.6 billion reais ($2.7 billion), up from about 12 billion reais in the same period last year.

Besides the positive impact of government subsidies, Ambev said the strong performance in Brazil also reflected the implementation of its pricing strategy. According to BTG Pactual’s analyst Thiago Duarte, a later-than-usual price hike possibly helped the company regain market share.

The so-called “coronavoucher” started in April with a monthly payment of 600 reais and was set to expire in September, but was renewed until yearend at 300 reais a month.

As the emergency aid flickers and competition heats up in 2021, Bradesco BBI sees room for Ambev’s margins to disappoint next year, according to analyst Leandro Fontanesi. He maintained a neutral rating and price target of 15.50 reais on Ambev.

©2020 Bloomberg L.P.

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